Digital 2017 beyond multi-channel breakfast meeting

T. Obradov - March 2017

Digital 2017: Beyond

Multi-Channel

Eden McCallum Breakfast Meeting8 March 2017

By Tamara Obradov


Welcome

Agenda:

● Introduction

● Retail evolution

● Digital Trends & Examples

● Case Discussion


Objectives today

● Overview of digital trends in retail

● Implications for retail organisations

● Discussion

● In general: Give you a better understanding of what is needed to succeed in

retail today


Retail Evolution


Retail Evolution

The NetherlandsAvg 3.6


Retail Evolution

● Where is Retail on mobile?

● Mobile conversions still need to catch up to desktop


Retail Evolution


Retail has evolved from expecting the customer to adapt, to adapting to the customer to thinking for the customer

Retailers should be thinking about:

● If I’m not seamlessly integrated in the future I won’t even be considered● From “Getting everything right” to “‘Keep’ getting it right without effort”


To ‘keep’ getting it right, there are three key trends to conquer

1. Customers don’t think in channels, they experience

2. Retail went from people-driven to technology-driven

3. Organize around the customer, not the product or the CEO


Customers experience the brand, they don’t think about channels → retailers are late to follow

● Customers experience a single type of touch-point

● Retailers have a single type of touch-point

● Customers sees multiple touch-points acting independently

● Retailers’ channel knowledge and operations exist in technical & functional silos

● Customer sees multiple touch-points as part of the same brand

● Retailers have a ‘single view of the customer’ but operate in functional silos

● Customer experience a brand, not a channel within a brand

● Retailers leverage their ‘single view of the customer’ in coordinated and strategic ways


Let’s plot some examples


With “Unified Commerce” you have the best chance to exceed expectations, stay in the loyalty loop and gain advocates


Digital Trend 2: It’s not only about the people anymore

● Retail capabilities are evolving ○ It’s no longer important how much experience you

have in purchasing, it’s all about the data○ The two fastest growing capabilities to develop are

■ The capability to plug-and-play new digital services

■ Data Science

● The unified commerce retailers are

technology-driven…

● ...and have created a connected system of

digital services


August 2011 - ~100 software services


September 2012 - ~350 software services


Jan 2014 - ~950 software services


...see the trend?

August 2011 September 2012 January 2014

~100 companies ~350 companies ~950 companies


March 2016 - ~3500 software service companies

March 2016~3500 companies


Digital trend 3: Customer at the helmOrganize around the customer, not the product or the CEO

● Data driven● Small teams focused around

customer segments● Cross-functional● Decoupled decision making &

autonomy● Scrum based → test & trial

● Hierarchy & layers● Experience/seniority over data● Long decision making● Authority over autonomy


If you don’t create a flexible and customer centric workforce you might not survive

Omzet ca. 600 miljoen


Currently the most advance retailers follow a small, cross-functional team organization


Example: Netflix organization is supported by a strongly documented culture

Loosely decoupled, cross-functional teams

Employee Autonomy

Strong culture focused on performance Flat organizational structure


Example: Amazon


Case Examples


Daniel Wellington example

● Company started in 2011 selling cheap but luxury inspired watches for $129-$149

● In 2015 selling over 1Mn watches per year (compared to Rolex and Tag Heuer who in a good year sell ~

● From $0 to over $200Mn in 5 years● $0 traditional marketing, solely influencers ● free products to social media stars and prominent personalities

Instagram engagement Source: thecirqle.com


E-mail marketing example

Example:● Weekly ladies shopping email sent on Sunday 10am● Reporting showed slowly declining revenue ● By analysing core customer segment device and journey usage they learned

that target segment peaks on Mondays and Wednesdays at 19.30● By changing the email moment and making the formating more device specific

revenue upsight was 10.2x


picnic


To be successful picnic will need to solve the last mile problem of online grocery

Source: Booz& CoNote: data is from 2010 not rectified for inflation or cost fluctuations

€X

+€17


● Amazon Dash

● Google Home / Amazon Echo

● Deliveroo dark kitchens

● Gooseberry intimates

Other noteworthy discussions / examples


Discussion